Happy Market Update! |
Jackson’s football team’s winning streak of 1 is over. They are officially 1-2. I didn’t agree with the officiating, but it is 4-6 year olds…and throwing a fit is frowned upon at this level. Someone of you wonder what level it is not frowned upon…and I must direct you to a live NFL game for evidence that it changes at some point. Anyway, coaching at these levels is difficult. Yes, it’s like herding cats, but it’s more than that. Brain communication moves slower than someone my age would like. Okay…maybe it’s just me. I struggle with knowing when to push harder and when to remember they are 4-6 year olds. |
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But they all ask if we won…it’s never did we lose? So optimistic. Well, when you don’t pull flags, they are going to score touchdowns. (sigh) But they are trying. I guess my job is to help them get better. Then use two hands, damn it! Okay…I got that out of my system (for now). But sometimes I wonder if he’s playing football because I like football. Kids mimic their parents, right? I don’t want my obsession with college football to keep him from his goal of being a ballerina some day, right? Wrong. I’m not okay with that. You should know me by now. But maybe he wans to play soccer? (ugh…fine) But I don’t live in a world where I am guessing anymore. So I asked him.
Here’s how this goes: T: Do you want to play football? J: Yeah. T: Yes, what? J: Yes I want to play football. T: Yes, I want to play football, what? J: (gives a frown) Yes, I want o play football, sir. T: (exhales) Good. Why? J: (looking dumbfounded) because I like it. T: okay, that makes sense. Why do you like it? J: it’s awesome. |
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I’ll keep working with him on fundamentals and getting back to the basics while you and I keep looking at the basics too. Something our government hopes we won’t look at. |
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Recently we spoke about the 10-2 yield curve, un-inverting. You may recall that back in 2022 when the yield curve inverted and then un-inverted, AND we had 2 back to back quarters of negative GDP, we received a new definition of recession. At this time, social media was alive with the real measure of a yield curve was the 10yr-3mo, and not the 10yr-2yr. So below is your update on the 10yr-3mo…still significantly negative. And in fact, is the longest it’s been this negative in history. You will notice in 2022, it did not turn negative which is why we got the new definition, in my opinion. So what now? If we have not hit a recession, are we waiting for this one to turn positive? What does it say about it being negative the longest in history? The Fed would say…don’t worry about it. That’s usually when I worry. |
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Consumer sentiment continues to underperform the markets. Meaning? Well, the markets continue to trade near all time highs, and yet, consumers are just not feeling it. You can see, in this chart, where the sentiment was prior to covid. And we have never gotten even close to those levels since. Yes, it’s higher than it was in 2022 which was the thick of the inflation surge. But if we are feeling like this, how can anyone say the economy is great? The math isn’t mathing. |
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From our friend, @nod008 on X, this next chart shows us how the “other” S&P 500s are doing…so NOT the Mag 7. I would argue that the quarterly earnings have not been great for some time outside of the Mag 7. (Mag 7 stocks = Apple, Microsoft, Amazon, Alphabet (parent of Google), Tesla, Nvidia, and Meta.) |
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More from the jobs world…here is what bigger government looks like. Job growth seems to be about growing jobs in the government world (which ties into my comment last week about government adding jobs to inflate job growth). I’m going to be honest…anyone who has sat way too long at the DMV would like to see Elon Musk clean up the government and hire efficient people. Government cannot be a place for people to just park their tuchus for a paycheck. Earn the damn thing. That’s what builds a non-entitled society. (How many of you were like, what the hell is a tuchus?) |
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Ending with good news…from Apollo. While Tim worries about record credit card debt, apparently the revolving credit owned by consumers is a small fraction of disposable personal income. I wonder if this includes Buffet/Musk/Gates, etc? Probably. Or maybe they don’t actually make disposable income anymore? Ha. How about we take out the top 1% and see what the rest looks like? Because of the below, Apollo says “no recession on the horizon”. I’ll end there because I said this was good news. Way to go, everyone! |
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(sigh) you know I can’t end there. Back to our friend NOD, spending continues to rise and consumer sentiment continues to move back towards its lows form 2022. 2022 is important because we peaked in the highest inflation in 40 years that summer. How much longer can people feel bad about spending and continue to do so? Either spending pulls sentiment up or sentiment pulls spending down. Per @kobeissletter on X, consumers already believe we are in a recession. I didn’t get that call…and I probably would have said yes before…now? I’ll go with undecided. Haha. It’s a choice! |
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10yr: Well what’s going on here? Happy, happy, sad, happy…? It looks that way. After a huge surge in the yield after the Fed’s 50 cut, we have finally stopped going up. The past 2 days have seen us hit the resistance (red line above the candlesticks) and has broken below 4% (for now). I’ll take it. That blue line coming up is the 20 day moving average and may act as support…which could keep rates higher. We are 3 weeks away from the next Fed decision. So it should be an interesting ride from now until then. Consequently, we are also 1 day less than 3 weeks away from the Presidential Election. Buckle up, people. |
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MBS: (Reminder up is lower rates here). Same happy – sad line…but more of a “eh” ending. The candlesticks are coming off the 100 day moving average (green line) but we need to move back up above that red moving average before it finished curving over (in my opinion). But, we will take not moving further down for now. |
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I like sports for the same reason I like music, singing, drama clubs, etc: you always practice the basics first. Sports: work out, run generic plays…then get to your flea flickers. Music? Gotta do scales, read the music sheet…then play Tchaikovsky. Singing? Gotta know the music sheet, sometimes latin words…then you can be in Madrigals. Drama? Step one…can’t have stage fright. You get it. Sometimes I forget this in my own life…so learning what I need to teach Jackson is also learning what I need to teach myself. Maybe you do to? Get back to basics in your career, friendships, church, whatever it is you need time to regroup in. Why do I bring this up? Next week I am traveling to Mexico to build homes for a few days on a church mission. I will try to get this newsletter out before I leave…but it may be short. So please forgive me. Or applaud me (for those of you who don’t like this much in one newsletter). But I am going to unplug to help people who don’t know I exist. Why? I need to remember what the hell we are doing all of this for…and it’s probably really good for my kiddo to see me do. Who can you help around you? |
Whatever doesn’t kill us, makes us stronger. |
Tim |
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